Technical Analysis

Trading pick of the week: NCL Industries

Yoganand D | Updated on September 27, 2020 Published on September 27, 2020

Investors with a medium-term perspective and high risk appetite can buy the stock of NCL Industries, a small-cap stock, at current levels.

Since recording a 52-week low at ₹48.2 in late March this year, the stock has been on an intermediate-term uptrend.

After testing a key resistance at ₹80 for more than a month, the stock emphatically breached it in early August and continued to trend upwards.

Moreover, in early August, the stock conclusively breached its moving average compression (21-, 50 and 200-day moving averages) at around₹80 and extended the rally. It has been on a short-term uptrend since then.

Following a minor corrective decline over the past two weeks, the stock on Friday took support at ₹100, which is a significant long-term base, and bounced up, gaining 6.5 per cent with above-average volume.

It managed to close above the 21-day moving average and trades well above the 50-day moving average.

The daily rate of change indicator has re-entered the positive terrain, implying buying interest. Besides, the weekly price rate of change indicator and the weekly relative strength index are featuring in the positive zone, implying bullishness.

The stock can continue to trend northwards and reach the price targets of ₹116 and ₹125 in the coming trading sessions. Investors can buy the stock with a stop-loss at ₹98.

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Published on September 27, 2020
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